Quality reputation of Chrysler at stake on current spat with NHTSA

Article by Anita Panait, on June 10, 2013

The refusal of Chrysler Group LLC to heed the request of the United States National Highway Traffic Safety Administration to recall 2.7 million Jeep models due to fire risks may damage the carmaker’s reputation for quality. The NHTSA have proposed that Chrysler recall around 2.7 million 1993-2004 Jeep Grand Cherokee and 2002-07 Liberty units after an investigation found that fuel tanks mounted behind the rear axle of these vehicles could pose fire risk.

Chrysler chief executive Sergio Marchionne, however, declined the proposal, saying that the concerned vehicles are safe. Chrysler claims that vehicles have no defect and met or exceeded the safety standards in place at the time of their production. The carmaker noted that the safety record of the concerned vehicles does not stand out statistically.

Executives at Chrysler are also wary of nodding to an agreement in which the carmaker would be required retrofit old vehicles to meet current notions of safety.

Jim Hall, auto industry analyst at 2953 Analytics, remarked to Automotive News that sometimes, "no" is the right answer despite the risks. He noted that that there are times when the carmaker’s data doesn't match with NHTSA's, which is the current case, adding that the agency is “overreacting.” He quipped that that it will be interesting to see how things “shakes out."

Indeed, the stakes are high for Chrysler’s refusal to recall the concerned vehicles. The carmaker’s decision could leave a negative impression to vehicle owners that it is placing profits above safety. Chrysler’s move may damage its reputation for quality and may even cost more than engaging in a recall. It should be noted that it is the same impression that shook off Toyota during and after its unintended-acceleration case in 2010. [source: automotive news - sub. required]

Topics: chrysler, nhtsa

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